Convention bookings down while plans for hotel heat up

Baltimore officials say intensified competition and a lack of lodging are taking a toll.

December 24, 2004|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Baltimore is forging ahead with a proposed publicly financed convention headquarters hotel - one of the costliest projects ever undertaken by the city - at a time when the convention center's future business is sagging and new competitors are posing an increased threat.

As the city's economic development arm pushes to sell $290 million in tax-exempt bonds to finance a 750-room Hilton, convention center bookings are set to plummet by nearly half in 2006 and sink over the next several years, with just four groups signed up for 2009 - well within the booking window for major conventions.

Meanwhile, Washington's new convention center has sold more than eight times as many hotel nights in 2009 as Baltimore's. Philadelphia has booked at least 50 groups a year through 2008, a year for which Baltimore has seven. That same year, Gaylord National Resorts plans to open an all-inclusive convention resort less than 10 miles from Washington in Prince George's County.

Convention officials concede that the intensified competition both in the region and nationwide is taking a toll on Baltimore.

"Am I worried that we have only 28 conventions [in 2006]? Yes ... and we do recognize we are a little behind our booking pace," said Debra Dignan, Baltimore Area Convention and Visitors Association associate vice president for convention sales. "There is so much [space] available out there, and associations think the closer they book, the better deal they'll get."

Gaylord National Resort and Convention Center on the Potomac is viewed as an especially formidable competitor. Scheduled to open the same year as Baltimore's planned four-star Hilton, the resort - the largest to break ground outside Las Vegas - is booking events through 2014.

With a single company in control of 400,000 square feet of exhibition and meeting space, 1,500 hotel rooms, a spa, nightclub and other amenities, Gaylord can undercut competitors with package deals, particularly for customers who also book events at its other resorts in Nashville, Tenn., Orlando and near Dallas.

The latest figures from Baltimore's convention bureau show 163,192 nights in area hotels booked for 2006, down from 300,054 the year before. That dwindles to 34,039 for 2009.

The Washington Convention Center - whose exhibition space is more than double Baltimore's - has booked 160 events through 2017. For 2009, the center, which opened last year, has booked 15 groups and 284,221 nights in area hotels, a level that dips only slightly through 2012.

Philadelphia, which has a 1,400-room convention hotel, has at least 50 groups booked each year through 2008, including 15 or 16 "citywide" conventions each year, and plans to expand its exhibit space in 2008.

Even without the new Gaylord resort, competitors in the past fiscal year alone outbid Baltimore for 94 meetings that would have generated more than 250,000 hotel room nights, according to BACVA. Baltimore lost the most business to Orlando, followed by Philadelphia, Boston and Washington.

"The competition for the convention and tourism dollar is ferocious, particularly in our region," said Clarence T. Bishop, chairman of the BACVA board of directors and Mayor Martin O'Malley's chief of staff. Without a convention hotel "we definitely will not increase the number of conventions that come into the convention center."

"When we go back and ask convention [planners] why you didn't come here, consistently one of the main reasons is because we don't have a significant size hotel facility adjacent to the convention center," Bishop said. "Without the hotel, we're going to continue to lose business that we are currently losing."

Since the Baltimore Convention Center's $151 million expansion opened in 1996, Baltimore officials have consistently blamed the lack of a convention headquarters hotel for the failure to meet projections, pointing to high hotel rates here as a major reason for lost business. With higher-than average occupancy rates, Baltimore's downtown hotels have little incentive to fill rooms by committing blocks at discounted convention rates.

What's more, a project that was awarded city incentives in 1997 to be a convention hotel - the 750-room Baltimore Marriott Waterfront Hotel in Harbor East - is nearly a mile from the convention center and was never required to commit rooms for conventions. And with 80,000 square feet of meeting space and a ballroom that seats more than 2,000, the Marriott Waterfront does a thriving meetings business of its own.

Now, less than 10 percent of the Marriott Waterfront's business comes from groups booked at the convention center, said Bobby Vaughan, area director of marketing for the hotel and the smaller Marriott Inner Harbor on South Eutaw Street. The hotel, with a higher-than average 72 percent occupancy rate, generally offers block discounts only if a group books a large dinner or other food functions at the hotel, Vaughan said.

Such a room-block agreement would be included in the deal with Hilton.

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